An alarming number of people within 10 years of retirement have no idea how much cash they will need to finance their later years, according to a new survey.
Research by a major pension provider has revealed that a third of those within a decade of collecting their pension have no idea about the money they will need to fund their retirement.
Poor pension planning
The key features of financial firm Aegon’s Retirement Readiness study that asked the over 55s about their retirement plans included:
- More than 30% do not know how much money they will need in retirement
- 30% ready to retire have no pension plan
- 40% do not know how much income their retirement savings are likely to generate
- 66% have no financial plan B if they have to give up work before their official retirement date
- 40% of women have no pension, compared to 30% of men
- The places where retirement finances are most at risk because of a lack of workplace pensions are Wales, where 46% of workers have no pension, and the South-West, where 43% have no pension
However, Aegon explained that although older workers approaching retirement had poor pension planning and a lack of financial awareness, younger retirement savers have less apathy and are starting to save in a small way.
Aegon UK’s Duncan Jarrett said: “Some of the results of our research give us some cause for concern as retirement savers seem confused about their finances, not keen to save and often don’t seem to understand the seriousness of their situation.
Financial future
“The results are not only age-related, but seem to relate to regions as well.
“Our biggest fear is for the lack of pension planning by those aged over 55 who are nearing retirement. Many industry observers talk about a pensions time bomb waiting to go off, but our report suggests that time is upon us.”
Jarrett also confirmed that younger retirement savers – aged 25 to 34 – seem to be more in touch with their finances and are already saving for their retirements.
“Starting to save a little earlier in life can make a real difference later on, as can regular saving through auto-enrolment pensions,” said Jarrett.
“My company feels that by making retirement savers aware of their problems and the available solutions, we can educate people into taking responsibility for the personal financial futures.”
